Two Asian Giants Enter New Era of Prosperous Friendship

Chinese Vice Premier Teng Hsiao-ping arrives in Tokyo today for a historic eight-day visit that both countries expect will enhance the new era of prosperous friendship between Asia's two giants.

The diminutive, 74-year old Teng, known as the economic pragmatist who leads China's rapid modernization, will bring a delegation of 44 high-ranking Chinese leaders on the first tour here by prominent officials of the Chinese communist government.

The visit climaxes a year of intense negotiations that have drawn the two Asian powers into a tightening cultural and economic alliance after years of hostility and war.

Japan, in a state of near euphoria, views the visit as an epochal event. Academinicians talk of reviving the two countries' ancient cultural tiew while pragmatic businessmen speak jubilantly of "the China boom" with its promise of rich trade agreements for depressed industries.

"It is totally a new age," declares Yaeji Watanabe, who as president of the Japan-China Association on Economy and Trade is perhaps the person most responsible for the new alliance.

"For the past 100 years, Japan has valued China too little," he said. "We despised them, and then we invaded them. It was wrong. The new treaty has ended that."

Watanabe was referring to the Peace and Friendship Treaty signed by the two countries on Aug. 12. The official purpose of Teng's visit is to exchange instruments of ratigication formally putting the treaty into effect.

China's number two man. Teng will be given a reception normally accorded a visiting head of state. He will dine with Emperor Hirohito, hold talks with Prime Minister Takeo Fukuda and pay a social call on his old acquaintance Kakuei Tanaka, the former prime minister disgraced in the Lockheed scandal.

Anxious about the possibility of disruptive incidents, Japan has mobilized a force of 65,000 police to guard his travels and to keep watch on nearly 88 rights groups that plan demonstrations against the Communist leader.

The visit is the culmination of many years of work by private associations and business leaders in Japan who, long before their government dared talk of normalizing relations with China, began preparing the ground for an economic rapprochement.

Watanabe, a former diplomat and official of Japan's Ministry of Trade and Industry, has held talks with Chinese leaders during 20 visits to Peking over the last 10 years. He has been aided by Yoshihiro Inayama, president of Nippon Steel and Japan's most powerful business leader.

Both foresaw an era of vast economic prosperity in trade with China and doggedly prodded a succession of reluctant prime ministers to seek closer ties. No Japanese government would entertain such a notion until the visit to Peking by former President Richard Nixon in 1972 suddenly opened the doors. Japan normalized relations with the mainland in 1972, abandoning its old partner on Taiwan in the process, and began serious negotiations for a treaty.

The economic alliance already has borne fruit. Japan's trade with China this year is nearly 50 percent greater than last year. In February, the two countries signed a long-term trade agreement that called for two-way trade amounting to $29 billion over eight years. But as a result of negotiations that followed the treaty signing, that is expected to be extended to 13 years and may encompass $60 billion.

The opportunities for Japan are enormous. China needs steel, industrial plants, and technological prowess, all of which Japan has in abundance. Even in the preliminary stages, China has indicated an eagerness to purchase enough steel and ships to salvage those two industries, suffering their worst depression in years.

In Japanese business circles, the potential of the China trade is being referred to in ironic terms as a welcome revival of the kamikaze, the divine winds. It is a reverse twist on the legendary event when sudden winds blew away the Chinese fleet and saved Japan from conquest by China.

Japan's business community is already deep into the practicalities of the China boom. Foryt-four companies are trying to enroll employes for Chinese language classes at Tokyo's Foreign Language University. Thousands of Japanese engineers will be sent to China to foster the modernization program and thousands of Chinese engineers will come to Japan.

A Chinese management team will come to Japan to study production systems and quality control programs in the same way Japan imported them from the United States a quarter of a century age.

Japan is even preparing to build a special petroleum cracking plant on its west coast to accomodate China's oil. The Tokyo stock exchange is experiencing its own China boom with a rise in value of shares in those companies expected to profit from the new alliance.

According to government soruces, negotiations are underway that may send $10 billion worth of complete industrial plants to machinery-starved China. The biggest is a huge steel plant to be built near Shanghai by Nippon Steel. By next year, Japan's exports of steel to China are expected to nearly match the amount now shiped to the United States.

Japan is also preparing to help develop China's oil reserves in the Pohai Gulf. An Osaka company has been asked to build two textile plants in China. China has proposed joint development of jet engines and has sought Japanese help in developing an enormous iron works in the Chitung region.

Over all the euphoria hangs one big question: Can China pay? Some pessimistic Japanese businessman believe China can never afford the costs of rapid modernization, and even the irrepressibly optimistic Watanabe admits he is worried about the prospects for the next 10 years.

China's total foreign exchange is believed to amount to only $24 billion, not enough to finance even the nearly stages Japan is eager to loan money and is negoatiating to lend an initial $2 billion from its export-import bank. China also is hinting it will abandon its ideological distate for foreign government loand and may accept money from Japan's overseas economic cooperation fund.

Ultimately China must pay its own way selling oil to Japan. However, pan's oil companies are insisting and they do not want to absorb anything like the large amount of oil much of it too waxy for ready use-that the Japanese government is hoping for. There are reports that current negotiations look forward to China selling Japan 350 million barrels of oil a year by 1990, a staggering amount that could end Japan's dependence on the Middle East and ease its [WORD ILLEGIBLE] of being cut off from the world's on supplies.

The thought of all these dreams dovetailing, creating an unprecedented era of prosperity of Japan, is what evokes the mood of euphoria on the eve of Teng's visit. Teng is regarded here as the key figure in the vision, a pragmatic modernist willing to jettison one ideological precept after another to make the trade deals work.

A long time ago, the earthy and outspoken Teng said that the cat that catches the mouse is good whether it is white or black and that is the sort of common sense that appeals to the practical businessmen of Japan.